Latest QLFS lays bare the failures of BEE

15 November 2023

The latest unemployment statistics presented in Stats SA’s Quarterly Labour Force Survey (QLFS) are another reminder that race-based policies, like BEE, have failed, and are continuing to do more harm than good for its intended beneficiaries. So says the Institute of Race Relations (IRR).

Such policies have only benefited a handful of politically connected businesspeople, while the vast majority of South Africans have been trapped within the resulting framework of little or no economic growth.

According to the most recent IMF forecast, South Africa’s GDP will grow by only 0.9% in 2023, very low compared to comparable economies and far below the level of economic growth necessary to make a sustainable and real dent in this country’s high levels of poverty and unemployment.

Even the recent Zondo Commission flagged race-based policies as a problem, with the commission’s report saying that “evidence shows that the ideals of [black] empowerment were grossly manipulated and abused to advance the interests of a few individuals”.

Policy must be judged on its outcome, not its intention, and it is crystal clear that the outcomes of BEE policies and legislation have been poor.

A ten-year analysis of the unemployment statistics shows that the unemployment level of black South Africans has increased from 28,1% in the third quarter of 2013 to 36% in the latest figures, a percentage point increase of 7.9%. This is another clear indication of BEE’s failure.

Said IRR Campaign Manager Mlondi Mdluli: “The ANC’s approach to addressing the failures of BEE by ramping it up to be ‘more aggressive’ – as recommended by Minister of Employment and Labour Thulas Nxesi – through the amendment of the Employment Equity Act (EEA) is no way to fix the serious problem of unemployment, poverty and inequality.”

The IRR’s Economic Empowerment for the Disadvantaged (EED) policy is an alternative approach that could address poverty and inequality. EED would give businesses an incentive to grow and create jobs, while also empowering South Africans who most need a socio-economic leg up. Redress is needed and needed urgently but it does not need to use race as a proxy. Policies that have failed, like BEE, must be scrapped in favour of policies that can deliver.

Concluded Mdluli: “For as long as Minister Nxesi, and the government of which he is part, continues to believe that more race-based laws will solve the country’s problems, unemployment will persist, and the majority of South Africans will continue to suffer.

“The government will only be able to effectively address the unemployment crisis by having frank discussions with key stakeholders, such as the IRR, that have formulated pro-growth, non-racial policy alternatives.”

Issued by Mlondi Mdluli, IRR Campaign Manager, 15 November 2023